Web3 is generating a lot of hype — but what exactly is it? From the metaverse to decentralized finance to NFTs and beyond, we break down what Web3 is today and what it could mean for the future of the internet.
Imagine an internet built, powered, and owned by its users instead of a few major tech companies.
Social media users could monetize their own data. Content creators could receive crypto payments directly every time someone views their latest post. Ride-sharing platforms could be owned by the drivers.
This is the promise of Web3, a decentralized internet built on an open, permissionless blockchain network.
The internet as we know it now is centralized — data flows through and is stored in data centers owned by a handful of companies. A few powerful players control the most widely used services and platforms. But in Web3, data storage and flow take place on networks that run on many computers without a single entity controlling them. Online services from e-commerce to social media to gaming are provided and controlled by democratic groups of developers, creators, and users.
Three use cases are already gaining traction today:
- Decentralized finance (DeFi): an ecosystem of smart contracts that allows participants to offer and access financial services in a peer-to-peer format, without relying on traditional intermediaries like banks, credit unions, or brokerages
- Non-fungible tokens (NFTs): digital assets — which can range from images to songs to videos — that are verified through blockchain technology
- Decentralized gaming: token-based gaming economies and virtual worlds powered by blockchain technology. Most decentralized games integrate NFTs in some capacity.
While a fully decentralized internet may still be a distant vision — and critics say the idea is little more than hype — its implications could be far-reaching.
Download the full report to learn about the elements of Web3, its use cases, and what it could mean for the future of the internet.
TABLE OF CONTENTS
- How does Web3 work?
- dApps aim to cut out the middle man
- DAOs govern Web3 apps and communities
- Decentralized networks own and control data on Web 3
- Decentralized identifiers (DIDs) verify Web3 users
- What is Web3 today?
- DeFi powers Web3 financial products and services
- NFTs could have use cases beyond art and gaming
- What could Web3 impact in the future?
- Digital content
- Dispute resolution
- Social media
- What are the challenges facing Web3?
- Web3 is a digital Wild West
- DAOs are vulnerable to abuse and centralized control
- Total decentralization is difficult to implement — and could leave Web3 on shaky ground
- Cryptocurrencies still face formidable hurdles